Facebook Offered $3B for Snapchat

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Facebook offered $3 billion for the photo-messaging application Snapchat, three times more than was reported earlier this week.

The $3 billion price tag comes from unnamed sources, according to the Wall Street Journal, and Snapchat's founders turned down the all-cash deal.

Are they insane? you may ask yourself. Maybe, or perhaps the two founders have a very strong belief in their product which has yet to make any money in its two-year existence. Remember Color? Yeah, we don't either.

Snapchat also has other suitors, including a Chinese conglomerate that wants to invest $200 million in the app and lead to a $4 billion valuation. The word is that founder and chief executive Evan Spiegel won't consider selling until next year when its numbers, and especially users, will be impressive enough to garner an even larger price tag. Then he can sell off all his stock and then be a 24-year-old billionaire (he's 23 now.)

Are they insane? you may ask yourself. How can a company with no revenue, no ads and no noticeable business plan be valued at billions of dollars? Snapchat declined to comment on the report, according to the WSJ.

We have to think that sometimes, even to Silicon Valley bigwigs, all this cash has to seem like Monopoly money.

Both Twitter and Pinterest have no problem raising cash and neither has proved profitable. However, Snapchat's cachet is that its used by teens and young adults, an audience that Facebook has said it's losing. Buying the app, even at a ridiculous price, would have stemmed some of the worry over its recent quarterly report -- but shouldn't investors worry more that it paid $3 billion for a photo-sharing app?